<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
<TABLE>
<S> <C>
/ / Preliminary Proxy Statement / / Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
CPC INTERNATIONAL INC.
--------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
CPC INTERNATIONAL INC.
--------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), or 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
CPC
(LOGO)
INTERNATIONAL PLAZA, P.O. BOX 8000, ENGLEWOOD CLIFFS, NEW JERSEY 07632-9976
March 15, 1995
Dear Stockholder:
On behalf of the Board of Directors, I am pleased to invite you to your
Company's 1995 annual meeting of stockholders to be held in Alpine, New Jersey,
on Thursday, April 27, 1995 at 9:30 A.M., local time. We hope that many of you
will be able to attend.
The matters to be acted upon by our stockholders are set forth in the
notice of annual meeting. At the conclusion of the meeting, we will hold an
informal session to present a brief report on the Company's business and respond
to your questions.
Whether or not you plan to attend the meeting, please sign, date and mail
your proxy card as soon as possible in the postpaid envelope enclosed. A summary
of the proceedings will be included in the midyear report.
If you plan to attend, please complete the reservation form on the inside
back cover and return it to us.
Sincerely yours,
/s/ CHARLES R. SHOEMATE
Charles R. Shoemate
Chairman, President and
Chief Executive Officer
(LOGO)
Printed on Recycled Paper
<PAGE> 3
CPC INTERNATIONAL INC.
INTERNATIONAL PLAZA
P.O. BOX 8000
ENGLEWOOD CLIFFS, N.J. 07632-9976
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
The annual meeting of stockholders of CPC International Inc. will be held
at Tamcrest Country Club, Route 9W, Montammy Drive, Alpine, New Jersey, on
Thursday, April 27, 1995 at 9:30 A.M., local time, for the following purposes:
1. To elect four directors, each for a term of three years, and one
director for a term of one year.
2. To consider and take action upon the appointment of independent
auditors for the Company for 1995.
3. To consider and take action upon a proposed amendment to the 1993
Stock and Performance Plan.
4. To transact such other business, if any, as may properly come before
the meeting.
Stockholders of record at the close of business on March 2, 1995 will be
entitled to vote at the meeting, and the holders of a majority of the issued and
outstanding shares of the capital stock will constitute a quorum for the
transaction of business.
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE SIGN, DATE AND RETURN
YOUR PROXY CARD PROMPTLY.
By order of the Board of Directors,
/s/ JOHN B. MEAGHER
John B. Meagher
Secretary
March 15, 1995
<PAGE> 4
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Proxy Solicitation and Voting Information............................. 1
Corporate Governance.................................................. 2
Stockholder Return Comparison......................................... 6
Compensation and Nominating Committee Report on Executive
Compensation....................................................... 7
Executive Compensation and Stock Ownership Tables..................... 11
Matters to be Acted Upon:
Proposal 1.
Election of Directors........................................... 16
Proposal 2.
Appointment of Auditors......................................... 22
Proposal 3.
Amendment to the 1993 Stock and Performance Plan................ 22
Other Business........................................................ 23
Proposals for the 1996 Annual Meeting................................. 23
Additional Information................................................ 24
Exhibit............................................................... E-1
</TABLE>
<PAGE> 5
CPC INTERNATIONAL INC.
INTERNATIONAL PLAZA
P.O. BOX 8000
ENGLEWOOD CLIFFS, N.J. 07632-9976
PROXY STATEMENT
This proxy statement, the accompanying proxy and the Company's annual
report to stockholders for 1994 are being mailed on March 15, 1995 to all
stockholders of record at the close of business on March 2, 1995, in connection
with the annual meeting of stockholders to be held on April 27, 1995 or any
adjournment of it.
PROXY SOLICITATION AND VOTING INFORMATION
The authorized capital stock of the Company consists of 900,000,000 shares
of common stock ($.25 par value) and 25,000,000 shares of preferred stock ($1.00
par value). On March 2, 1995, there were issued and outstanding and entitled to
be voted 146,364,403 shares of common stock and 2,170,854 shares of convertible
preferred stock ("ESOP preferred stock") held by the trustee of the employee
stock ownership plan ("ESOP") component of the Company's Savings/Retirement Plan
for Salaried Employees ("Savings Plan"). Each share of common stock and ESOP
preferred stock entitles the holder to cast one vote on each matter to be voted
upon at the annual meeting. If a stockholder is a participant in the CPC
International Stock Fund or ESOP component of the Savings Plan, the proxy will
also serve as a voting instruction to the trustee of the Savings Plan. Shares
held in either the CPC International Stock Fund or the ESOP component of the
Savings Plan as to which no voting instructions have been received (as well as
unallocated shares held by the trustee) will be voted by the trustee in the same
proportion as the shares for which instructions have been received. If a
stockholder is a participant in the Company's Automatic Dividend Reinvestment
Plan, the shares of common stock shown on the proxy include the number of full
shares held in the Plan account, as well as shares registered in the
stockholder's name.
Proxies marked as abstaining on any matter to be acted upon, and votes
withheld by brokers on non-routine matters in the absence of instructions from
beneficial owners (broker non-votes), will be treated as present at the meeting
for purposes of determining a quorum but will not be counted as votes cast on
such matters.
The accompanying proxy is solicited by and on behalf of the Board of
Directors of the Company. All shares of stock entitled to be voted which are
represented by valid and unrevoked proxies will be voted in accordance with the
instructions thereon. In the absence of such instructions, the shares will be
voted as recommended by the Board of Directors or, in the absence of such
recommendation, in the discretion of the persons named in the accompanying
proxy. A proxy may be revoked at any time before it is voted at the annual
meeting by written notice of revocation to the Secretary of the Company, a valid
proxy bearing a later date, or vote by ballot at the meeting.
<PAGE> 6
The solicitation of proxies is being made by mail and may also be made by
telephone, other electronic means, or in person using the services of directors,
executive officers, and regular employees of the Company. The cost of the
solicitation will be paid by the Company, which has retained D. F. King & Co.,
Inc., 77 Water Street, New York, New York 10005, to assist in the solicitation
for a fee estimated not to exceed $11,000 plus reasonable expenses. On behalf of
the Company, D. F. King & Co., Inc. will reimburse brokers, banks and others who
are record holders of the Company's stock for reasonable expenses incurred in
obtaining voting instructions from the beneficial owners of such stock.
CORPORATE GOVERNANCE
BOARD STRUCTURE AND INDEPENDENCE
The BOARD OF DIRECTORS presently consists of twelve members, of whom nine
are outside directors. Each of the outside directors, in the opinion of the
Board, is independent of management and free from any relationship that would
interfere with the exercise of independent judgment, and is eligible to serve as
a member of the Audit Committee or the Compensation and Nominating Committee
under the applicable rules and regulations of the Securities and Exchange
Commission, the New York Stock Exchange and the Internal Revenue Service. The
facts bearing on the independence of each outside director are reviewed annually
by the Audit Committee and reported to the full Board.
The Company's corporate governance process is the subject of regular review
by the Board.
- The Board conducts an annual evaluation of its own structure and
performance, including an assessment of the appropriateness and
effectiveness of its governance practices.
- Regular executive sessions are held at the end of Board meetings to
permit frank and unstructured discussions between the outside directors
and the chief executive officer. These discussions frequently relate to
governance procedures and items for the Board's agenda.
- Periodic "one-on-one" meetings are held between the chief executive
officer and each outside director, to provide additional opportunity for
private dialogue.
Each year, the directors consider and approve specific items to be placed
on the agendas for meetings of the Board for the year.
- In advance of each meeting, management distributes to the directors the
agenda and financial and other business information, including background
summaries of presentations to be made at the meeting, to facilitate full
and informed discussion of the agenda items at the meeting.
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<PAGE> 7
BOARD OVERSIGHT OF MANAGEMENT
A principal function of the Board is to evaluate the performance of the
chief executive officer and other executive officers. This evaluation process
occurs regularly throughout the year, in formal and informal ways.
- A formal performance evaluation occurs in January of each year. It begins
with a presentation to the Board by the chief executive officer of the
operating results for the previous year compared to the goal, and the
operating plan and goal for the new year. The outside directors, meeting
in executive session, then receive and discuss a report from the chief
executive officer on the performance of senior management, management
organization and development, and executive succession planning. Finally,
with the Chairman of the Compensation and Nominating Committee presiding
and in the absence of the chief executive officer, the outside directors
review his performance.
- Immediately following the January Board meeting, the Compensation and
Nominating Committee reviews and approves the compensation of the chief
executive officer and the other executive officers, including annual
bonuses for the preceding year, proposals for salary increases to become
effective during the ensuing year, and long-term incentive awards.
- The Board conducts an annual review of the longer-term business
strategies of the Company and each of its operating divisions.
- The Board also receives presentations of the annual operating results and
goals for each division, as well as for the Company as a whole.
The Board has established a policy encouraging its members to visit
principal facilities of the Company. This policy is intended:
- To give outside directors the opportunity to exercise a more informed
judgment concerning the business operations of the Company.
- To promote increased contact between outside directors and senior
management by enabling the directors to meet with managers at their own
base of operations.
- To enable outside directors to report to the Board personal observations
and reactions resulting from such visits.
Outside director access to management is further fostered by:
- Designation of corporate officers as the Committee Executives to work
directly with the Chairman of each Committee of the Board.
- An outside director orientation program.
- Attendance by outside directors at senior management meetings.
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<PAGE> 8
COMMITTEES OF THE BOARD
There are four Committees of the Board, each of which is chaired by an
outside director.
- The chairmanship and membership of all of the Committees are rotated on a
regular basis to give the directors a broader knowledge of the Company's
affairs.
- The Board conducts an annual review of the charter of each Committee.
- Each Committee establishes its own agendas for the year, and conducts a
year-end evaluation of its performance by comparing the topics considered
at meetings with its charter as established by the Board.
- Oral reports of the Committee activities are given at each Board meeting
and minutes of Committee meetings are sent to all of the directors.
The AUDIT COMMITTEE, which is composed entirely of outside directors, held
four meetings in 1994. Among its functions are to review the scope and results
of the annual audit, approve the non-audit services rendered by the independent
auditors and consider the effect thereof on the independence of the auditors,
and recommend to the Board appointment of independent auditors for the ensuing
year subject to ratification by the stockholders.
The Committee also reviews the proposed financial statements for the annual
report to stockholders, accounting policies, internal control systems and
internal auditing procedures, and the process by which unaudited quarterly
financial information is compiled and issued. Both the independent auditors and
the corporate general auditor meet privately with the Committee on a regular
basis.
The Committee reviews annually the independence of each outside director.
The COMPENSATION AND NOMINATING COMMITTEE, which is composed entirely of
outside directors, held five meetings in 1994. The Committee approves the
compensation of all executive officers and administers executive incentive
compensation plans, utilizing the advice of outside compensation consultants. It
also reviews employee benefit plans and recommends to the Board proposals for
adoption, amendment or termination of such plans. The Committee recommends to
the Board of Directors the compensation arrangements for outside directors, and
administers the Deferred Compensation and Retirement Income Plans for Outside
Directors.
This Committee develops criteria for Board membership and, with the
assistance of outside consultants, considers candidates for membership on the
Board. The Committee also reviews, against established criteria, the performance
of incumbent directors whose terms are expiring prior to recommending to the
Board the nominees for election as directors at the annual meeting of
stockholders.
Any stockholder who wishes to recommend a candidate for consideration by
the Committee as a nominee for director may do so by writing to the Secretary of
the Company and furnishing a statement of the candidate's experience and
qualifications.
4
<PAGE> 9
The CORPORATE AFFAIRS COMMITTEE, which is composed of a majority of outside
directors, held four meetings in 1994. The Committee reviews policies and
programs relating to business ethics, community relations, compliance with
antitrust laws, customer and consumer relations, disclosure of information and
insider trading, employee relations, and protection of the environment. It also
reviews major litigation, crisis management organization, and programs for
communication with investors, governments and the public.
The FINANCE COMMITTEE, which is composed of a majority of outside
directors, held four meetings in 1994. The Committee reviews policies and
practices of the Company affecting its financial structure and position, short-
and long-term financing, foreign exchange management, financial derivatives
including commodities and hedging, capital expenditures, dividends, insurance
coverage and taxes. It recommends to the Board the appointment of trustees and
investment managers under employee benefit plans and reviews their performance,
and recommends the annual contributions by the Company to fund such plans.
BOARD MEETINGS AND COMPENSATION
The Board held ten meetings in 1994, and all of the directors attended at
least 75 percent of the aggregate of the meetings of the Board and Committees of
the Board of which they are members. Attendance of all directors at such
meetings averaged 92 percent.
Outside directors receive an annual retainer of $44,000, and fees of $1,000
for each Board and Committee meeting attended and for each day spent visiting
Company facilities. Outside directors who serve as chairmen of the Committees of
the Board receive an additional annual retainer of $3,000. Employee directors do
not receive any additional compensation for services in that capacity.
Two-thirds of the annual retainer is paid in cash, and one-third is paid in
the form of common stock of the Company which is mandatorily deferred until
retirement under the Deferred Compensation Plan for Outside Directors. This Plan
further provides that all or part of a director's cash compensation may, at the
director's option, be deferred, invested in common stock of the Company or in an
interest-bearing account, and paid after retirement from the Board.
The Company has a Retirement Income Plan for Outside Directors whereby
outside directors who have served as such for five or more years will receive,
upon retirement from the Board, an annual payment equal to the rate of annual
cash retainer in effect on the date of their retirement, payable for a period
equal to the shorter of (a) the number of years and months the retired director
served as a member of the Board of Directors, or (b) the life of the retired
director.
Pursuant to the Board's policy on tenure of directors, outside directors
and former chief executive officers will not be renominated for election as a
director after attaining age 70, and other employee directors will not be
renominated following retirement as an officer.
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<PAGE> 10
STOCKHOLDER RETURN COMPARISON
The following graph compares the yearly percentage change in the cumulative
total return on the Company's common stock with the cumulative total return of
the Standard & Poor's Foods Index (the "S&P Foods Index"), the Standard & Poor's
500 Stock Index (the "S&P 500 Index") and a Peer Group Index of food and
food-related companies. As explained in the Compensation and Nominating
Committee Report on Executive Compensation on page 8, the companies in the Peer
Group were approved by the Committee for measurement of the Company's
performance during the 1995 performance cycle established under the 1993 Stock
and Performance Plan. This cycle began on January 1, 1995 and will terminate on
December 31, 1998. The historical performance of the Peer Group Index, weighted
for market capitalization, is shown as a reference. The Peer Group consists of
Archer-Daniels-Midland Company, Campbell Soup Company, Con Agra, Inc., General
Mills, Inc., H.J. Heinz Company, Hershey Foods Corporation, Hormel & Company,
Kellogg Company, McCormick & Company, Incorporated, The Quaker Oats Company,
Sara Lee Corporation, Smucker (J.M.), Co., Unilever N.V., and Wm. Wrigley Jr.
Company. The graph assumes that $100 was invested on December 31, 1989 in each
of CPC common stock, the S&P Foods Index, the S&P 500 Index, and the Peer Group
Index, and that all dividends were reinvested.
<TABLE>
<CAPTION>
CPC Inter-
Measurement Period national S&P Foods S&P 500 Peer Group
(Fiscal Year Covered) Inc. Index Index Index
<S> <C> <C> <C> <C>
1989 100 100 100 100
1990 115.92 107.79 96.89 109.26
1991 129.23 157.25 126.42 160.63
1992 148.33 156.88 136.05 163.19
1993 143.62 143.97 149.76 155.27
1994 165.07 160.92 151.74 167.20
</TABLE>
6
<PAGE> 11
COMPENSATION AND NOMINATING COMMITTEE REPORT
ON EXECUTIVE COMPENSATION
GENERAL DISCUSSION OF SHORT-TERM COMPENSATION
The Company's short-term compensation program, consisting of base salary
and annual bonus, is administered by using the concepts of a salary range and
target bonus for each executive position. Salary ranges and bonus targets are
established reflecting data from salary surveys of companies in the consumer
goods and food sectors. The companies surveyed are those with which the Company
competes in the marketplace in business results, for human resources, and in
stockholder return. These companies are similar but not identical to those in
the S&P Foods Index and the Peer Group Index in the Stockholder Return
Comparison graph on page 6 because survey data is not available for all of such
Index companies.
Each salary range has a midpoint which represents the average salary for
comparable surveyed positions, and a range that varies about 27% above and below
midpoint for the highest level position and about 24% for the lowest level
position. An individual executive's progress through and position in the salary
range depend primarily upon individual performance and time in the job. Target
annual bonuses have also been established for each position as a percentage of
salary. These target annual bonus levels are at the middle range of bonus
targets for similar positions in the surveyed companies. The size of bonus
actually paid depends upon the performance of the Company, the business unit,
and the individual. The principal factors used in assessing such performance
include earnings per share growth at the Company level, sales and operating
income growth at both the Company and business unit levels, and achievement of
agreed-upon objectives at the business unit and individual level. The relative
importance given each of these factors in determining bonuses is discretionary
on the part of the Committee and may vary by individual position
responsibilities and from year to year. In addition to surveys of competitive
practice, the Committee, which consists entirely of outside directors,
periodically uses independent consultants to review these salary ranges and
bonus targets for accuracy and appropriateness, and to review the
appropriateness of compensation actually paid. It is the Company's objective to
be fully competitive in salaries and bonuses paid (generally at compensation
survey average levels) with companies with which it competes.
BASIS FOR SPECIFIC SHORT-TERM COMPENSATION ACTIONS
The base salaries in 1994 of the five highest paid executive officers named
in the Summary Compensation Table on page 11, vary from 10% below to 10% above
midpoint of their respective ranges. As noted earlier, the salary range midpoint
for a position represents the average salary for that position within the
surveyed group of companies. In the salaries reported in the Table, variances
from midpoint correlate to individual performance and time in position. In the
Committee's opinion, Company base salaries are well within competitive norms and
appropriately reflect individual contribution and impact of the position upon
Company results.
Bonuses for executive officers with corporate responsibilities reflect
overall corporate performance as well as individual performance. Bonuses for
executive officers with operations responsibilities primarily reflect business
unit performance, but also reflect corporate
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<PAGE> 12
performance as well as individual performance. In 1994, before special charges
for 1994, earnings per share were up 7.5%, operating income increased 6.3%,
volumes were up over 9.1%, and return on equity was about 26%. Based on these
results and respective business unit results, and relative to the surveyed
companies referred to above, bonus awards for executive officers are appropriate
and well within competitive norms. Bonuses for the five highest paid executive
officers range from about 15% below target bonus to 3% above target bonus, and
total bonuses for all executive officers increased about 8% over the previous
year.
Specifically with regard to the chief executive officer, Mr. Shoemate, the
Committee authorized a salary increase effective March 1994 equating to 6.8% on
an annualized basis. This increase was based on Company performance for the
previous year, Mr. Shoemate's position in salary range, and the Committee's
judgment of his individual performance in leading the organization toward
achievement of its strategic, operational, and other objectives. Mr. Shoemate's
bonus for 1994 was $485,000. This represents 67% of base salary at the time of
the award, compared to a target bonus of 65%. This bonus award was based on Mr.
Shoemate's performance in leading the Company to achieve strong financial
results, as well as his strategic leadership in areas such as capital investment
and acquisitions. His award also reflects continued progress in the areas of
organizational effectiveness, management development, corporate governance and
corporate values.
GENERAL DISCUSSION OF LONG-TERM COMPENSATION
The Company's long-term compensation program consists of annual awards of
performance units and stock options under the Stock and Performance Plan. The
number of options granted is equal to the number of performance units. For a
more detailed description of how these tandem awards work, refer to footnote (1)
to the Option Grants table on page 12. The size of performance awards granted
depends upon the individual's performance, the size of awards previously granted
and, to a lesser extent, time in position. The weight given to each factor may
vary by individual and from year to year in the Committee's discretion. The size
of awards is generally in the mid-range of long-term compensation practices
among surveyed consumer goods and food sector companies. Competitiveness is
assessed by independent consultants' evaluations of survey data. Because of the
wide range of approaches to long-term compensation, companies surveyed for this
purpose are similar but not identical to those surveyed for short-term
compensation.
Earning of awards depends entirely upon the Company's stockholder return
(stock price appreciation plus dividends paid) compared to a group of food and
other consumer products companies with which the Company believes it competes
for investors. Each year the Committee reviews and approves the companies to be
included in the comparator group for the performance cycle established in that
year. The comparator group approved for the cycle established in 1995 is the
Peer Group described under "Stockholder Return Comparison" on page 6. The award
earned is paid primarily in Company common stock. To the extent that performance
awards are earned, an equivalent number of the options granted in tandem are
cancelled. The value of the award earned is dependent upon the value of Company
stock and its price appreciation from the beginning to the end of the four-year
performance cycle. Payments are made at the end of the four-year cycle.
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<PAGE> 13
BASIS FOR SPECIFIC LONG-TERM COMPENSATION ACTIONS
Award payments made in January 1995 and reported in the Summary
Compensation Table on page 11 reflect annual and cumulative stockholder results
over a four-year period beginning January 1, 1991 and ending December 31, 1994.
During the four-year cycle, participants had the opportunity to earn 25% of
their awards in each year of the cycle. In the first cycle year (1991), nothing
was earned. In the second year (1992), 25% was earned. In the third year (1993),
18.75% was earned, and in the fourth and final year (1994), 25% was earned.
Thus, over the four years, 68.75% of the potential performance award was earned
and paid at the end of the cycle. From the date of the award, the Company's
share price increased 36%, from $38.9375 to $52.9375.
Since 68.75% of the performance award was earned, 68.75% of the tandem
options were cancelled. The balance of 31.25% of the stock options granted
remain in effect with an exercise price equal to 100% of the fair market value
of the Company's common stock at the date of the award in 1991. This provides
continuing incentive to increase share price and, therefore, return to the
stockholder. Without share price increase, these options have no value to the
executive.
In 1994, Mr. Shoemate received an award of 40,000 performance units which
may be earned over a four-year cycle ending in 1997, and a tandem award of
40,000 stock options. The Committee's decision to grant this award was based
upon its assessment of the long-term compensation survey data, and independent
consultants' evaluations thereof, referred to above. The award is designed to
provide further incentive for Mr. Shoemate to lead the Company in maximizing
stockholder value.
Based on survey data, the aggregate potential value of long-term awards is
competitive. The value of awards is highly leveraged, so that if the Company's
performance is above or below that of the comparator group of companies referred
to earlier, the value of payments to participants may be well above or well
below that provided by such companies.
OVERALL PROGRAM RISK AND LEVERAGE
As the compensation tables in this proxy statement indicate, a significant
portion of executive compensation has been placed at risk. Payments under the
annual bonus program are dependent upon annual business results and individual
performance. Long-term award payments are dependent upon the Company's
stockholder return relative to the comparator group of companies referred to
earlier. In the case of Mr. Shoemate, 71.4% of his annual and long-term
compensation came from variable compensation plans which relate to Company
performance and only 28.6% from base salary. Similar degrees of risk exist for
the four other highest paid executive officers.
EXECUTIVE STOCK OWNERSHIP TARGETS
In 1993, the Company established stock ownership targets for all
participants in the Company's Stock and Performance Plan. The ownership target
for the chief executive officer is seven times base salary; for the most senior
operating and corporate staff officers it is five times base salary; for
remaining officers, it is three times base salary; and for non-
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<PAGE> 14
officer participants, it is equal to base salary. Stock used to assess this
ownership target includes stock directly owned by the executive, and stock owned
indirectly through participation in the Deferred Stock Unit Plan described in
footnote (3) to the Stock Ownership Table on page 15, but excludes shares
covered by unexercised stock options. Executives are expected to attain these
ownership targets within three to five years, although executives who have been
in their positions for a considerable period or who have been participants in
the Stock and Performance Plan for some time are expected to achieve target
ownership levels sooner. Although ownership targets were only recently
established, three executive officers named in the Summary Compensation Table
exceed their targets. In addition, Mr. Shoemate has already attained about 77%
of his target of about 100,000 shares. Mr. Shoemate has sufficient stock options
to achieve target ownership level during the specified time period, and has
expressed his intention to exercise additional options as prudent financial
planning and personal economic circumstances permit. Furthermore, the 1992 cycle
of the Stock and Performance Plan, based upon the Company's competitive
performance in the first three years of the cycle, will result in significant
additional shares being earned and added to Mr. Shoemate's total ownership
position in January 1996.
DEDUCTIBILITY CAP ON COMPENSATION EXCEEDING $1,000,000
The Committee has reviewed the 1993 tax law changes and proposed Internal
Revenue Service regulations regarding the limitation on deductibility of annual
compensation payments in excess of $1 million to each of the five highest paid
executive officers. It is the Committee's policy to eliminate or limit, to the
extent deemed prudent, the compensation which would not be deductible under
these rules. The Committee's conclusion is that the new rules will have no
impact on the Company for 1994, and it is anticipated that there will also be no
impact for 1995; this is because a substantial portion of compensation paid or
to be paid in those years to the five highest paid executive officers satisfies
"grandfather" provisions in these rules and, as a result, is excluded in
determining whether the $1 million cap is exceeded. This includes salaries paid
under employment agreements, and compensation resulting from stock option grants
and performance awards under the Company's Stock and Performance Plans. The
Board of Directors recommends that the stockholders approve an amendment to the
1993 Stock and Performance Plan, as set forth in Proposal 3 on page 22 of this
proxy statement, so that compensation paid under the Plan will meet the
"performance related" exception in the new rules and will continue to be
excluded.
Compensation and Nominating Committee:
T. H. Black, Chairman
A. C. DeCrane, Jr.
W. C. Ferguson
R. G. Holder
W. S. Norman
10
<PAGE> 15
EXECUTIVE COMPENSATION AND STOCK OWNERSHIP TABLES
The following table summarizes the compensation awarded or paid to the
chief executive officer and each of the other four most highly compensated
executive officers of the Company (the "named executive officers") for services
rendered in all capacities during each of the last three fiscal years.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
------------------------------------
AWARDS PAYOUTS
---------- ---------
ANNUAL COMPENSATION SECURITIES LONG-TERM
------------------------ RESTRICTED UNDERLYING INCENTIVE ALL OTHER
NAME AND SALARY BONUS STOCK OPTIONS/ PAYOUTS COMPENSATION
PRINCIPAL POSITION YEAR ($) ($) AWARDS($) SARS(#)(1) ($)(2) ($)(3)
------------------------ ---- ------- ------- --------- ---------- --------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
C. R. Shoemate, 1994 716,667 485,000 0 40,000 1,304,188 109,638
Chairman, President 1993 670,833 455,000 0 36,000 696,094 45,146
and 1992 625,000 430,000 0 34,000 625,933 41,362
Chief Executive
Officer
R. J. Gillespie, 1994 453,750 215,000 0 20,000 698,645 71,564
Senior Vice President 1993 432,083 215,000 0 18,000 502,734 27,373
and President of the 1992 400,000 185,000 0 17,000 500,766 25,837
Best Foods Division
A. Labergere, 1994 362,500 220,000 0 20,000 465,781 21,700
Senior Vice President 1993 337,500 190,000 0 18,000 212,672 15,500
and President of the 1992 310,000 170,000 86,875(4) 15,000 183,614 12,400
CPC Europe Division
C. B. Storms, 1994 359,583 170,000 0 13,500 605,489 23,840
Senior Vice President 1993 341,667 165,000 0 13,500 483,375 21,843
and General Counsel 1992 320,833 155,000 0 13,500 500,766 21,254
K. Schlatter, 1994 342,500 160,000 0 13,500 465,781 105,319
Senior Vice President 1993 302,500 150,000 0 12,000 348,047 19,404
and Chief Financial 1992 258,333 120,000 0 11,000 354,697 17,052
Officer
</TABLE>
---------------
(1) No stock appreciation rights ("SARs") were granted to the named executive
officers in any of the three reporting years.
(2) Includes cash and the market value of the Company's common stock paid in
respect of performance units awarded under the 1984 Stock and Performance
Plan at the end of four-year performance cycles.
(3) Includes the following for 1994:
a. Company matching contributions to defined contribution plans as follows:
C. R. Shoemate, $46,793; R. J. Gillespie, $30,251; A. Labergere,
$21,700; C. B. Storms, $23,840; and K. Schlatter, $23,242.
b. Value of premiums paid by the Company under the Executive Life Insurance
Plan as follows: C. R. Shoemate, $57,062; R. J. Gillespie, $41,313; and
K. Schlatter, $82,077.
c. For C. R. Shoemate, $5,783 of above-market interest at the rate credited
to all participants in the Deferred Compensation Plan, pursuant to which
all or a portion of annual bonus may be deferred and credited to an
interest bearing account, and paid over a fifteen-year period following
retirement.
(4) Represents the value of 2,000 shares of restricted stock on the date of
award. Restrictions lapse on one-fourth of the shares on each of the first
four anniversary dates of the award. On December 31, 1994 the 1,000
remaining restricted shares had a value of $53,250. Dividends are paid on
restricted stock at the rate paid to all stockholders. The named executive
officers hold no other shares of restricted stock.
11
<PAGE> 16
OPTION GRANTS
Information concerning grants of stock options in 1994 is presented in the
following table. The options were granted at an exercise price equal to the fair
market value of the Company's stock on the date of grant, in tandem with
performance units, the material terms of which are set forth in footnote (1) to
the table.
OPTION GRANTS IN 1994
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF
STOCK PRICE APPRECIATION
INDIVIDUAL GRANTS FOR 10-YEAR OPTION TERM
---------------------------------------------------------------------- -------------------------------
NUMBER OF PERCENT OF
SECURITIES TOTAL OPTIONS
UNDERLYING GRANTED TO EXERCISE 0% 5%(2) 10%(2)
OPTIONS EMPLOYEES PRICE EXPIRATION ($47.50) ($77.36) ($123.17)
NAME GRANTED(#)(1) IN 1994 ($/SHARE) DATE ($) ($) ($)
--------------------------------- ------------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
C. R. Shoemate...... 40,000 5.3 47.50 1/17/04 0 1,194,486 3,026,824
R. J. Gillespie..... 20,000 2.7 47.50 1/17/04 0 597,243 1,513,412
A. Labergere........ 20,000 2.7 47.50 1/17/04 0 597,243 1,513,412
C. B. Storms........ 13,500 1.8 47.50 1/17/04 0 403,139 1,021,533
K. Schlatter........ 13,500 1.8 47.50 1/17/04 0 403,139 1,021,533
</TABLE>
---------------
(1) The options listed were granted in tandem with an equivalent number of
performance units under the 1993 Stock and Performance Plan. The performance
units were issued for a cycle of four years' duration, with a goal based on
improvement in stockholder value, determined by the increase in the value of
common stock of the Company during each year of the cycle assuming
reinvestment of dividends, measured against the performance of common stock
of comparable companies. Up to 25% of the units may be earned in each year
of the cycle and are payable at the conclusion of the cycle. To the extent
performance units are earned and payable, a corresponding number of options
are cancelled. To the extent options are exercised, a corresponding number
of performance units are cancelled. All options were granted on January 18,
1994 and became exercisable on January 18, 1995. Under the 1993 Plan, in the
event of a change in control of the Company, all performance cycles will
terminate and participants will receive the value in cash of the performance
units theretofore earned and 100% of the units that could have been earned
during the remainder of each of the cycles. The amounts paid to the named
executive officers for the cycles ending in 1994, 1993 and 1992 are shown as
"Long-term Incentive Payouts" in the Summary Compensation Table on page 11.
(2) The amounts shown under these columns are calculated at the 5% and 10% rates
set by the Securities and Exchange Commission and are not intended to
forecast future appreciation of the Company's stock price. The amounts shown
assume that no performance units will be earned so that all options granted
will be exercisable.
12
<PAGE> 17
OPTION/SAR EXERCISES AND YEAR-END VALUES
The net value realized upon the exercise in 1994 of previously granted
options and SARs, and the number and value of unexercised options and SARs, are
shown in the following table.
AGGREGATED OPTION/SAR EXERCISES IN 1994
AND OPTION/SAR VALUES AS OF DECEMBER 31, 1994
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS/SARS AT OPTIONS/SARS AT
DECEMBER 31, 1994(#) DECEMBER 31, 1994($)(2)
SHARES -------------------- -----------------------
ACQUIRED VALUE EXERCISABLE/ EXERCISABLE/
NAME ON EXERCISE(#) REALIZED($)(1) UNEXERCISABLE UNEXERCISABLE
------------------------- -------------- -------------- -------------------- -----------------------
<S> <C> <C> <C> <C>
C. R. Shoemate........... -- -- 85,188/91,000 1,025,346/623,719
R. J. Gillespie.......... 8,500 330,898 27,874/45,749 707,838/315,423
A. Labergere............. 345 4,808 5,187/43,500 59,294/287,328
C. B. Storms............. -- -- 20,937/33,624 462,872/238,033
K. Schlatter............. -- -- 15,374/30,500 334,055/209,547
</TABLE>
---------------
(1) Amounts shown are based on the difference between the market value of the
Company's stock on the date of exercise and the exercise price.
(2) Amounts shown are based on the difference between the closing price of the
Company's common stock on December 30, 1994 ($53.25) and the exercise price.
PENSION BENEFITS
The following table illustrates annual pension benefits payable under the
Company's defined benefit pension plans for salaried employees.
PENSION PLAN TABLE
<TABLE>
<CAPTION>
5-YEAR AVERAGE YEARS OF SERVICE
ANNUAL -----------------------------------------------------
COMPENSATION 10 15 20 25 30(1)
-------------------------------------------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
$ 400,000.................................. $ 48,000 $ 72,000 $ 96,000 $ 120,000 $ 144,000
600,000.................................. 72,000 108,000 144,000 180,000 216,000
800,000.................................. 96,000 144,000 192,000 240,000 288,000
1,000,000.................................. 120,000 180,000 240,000 300,000 360,000
1,200,000.................................. 144,000 216,000 288,000 360,000 432,000
1,400,000.................................. 168,000 252,000 336,000 420,000 504,000
</TABLE>
---------------
(1) No additional benefits accrue after 30 years of service.
Compensation covered by the plans comprises salary and, with certain
limitations, bonus payments. Compensation in 1994 for the named executive
officers and their years of service for purposes of the plans as of December 31,
1994, were as follows: C. R. Shoemate, $1,075,000 and 30; R. J. Gillespie,
$668,750 and 29; A. Labergere, $543,750 and 11; C. B. Storms, $529,583 and 30;
and K. Schlatter, $502,500 and 30. Amounts shown in the
13
<PAGE> 18
Pension Plan Table are computed as a straight life annuity upon retirement at
age 62 or later and are not subject to any deduction for Social Security
benefits.
EMPLOYMENT AGREEMENTS AND SPECIAL SEVERANCE PROGRAM
The Company offers employment agreements to all of its executive officers
and certain other key executives. In addition to setting forth general terms and
conditions of employment, the agreements provide for the continuation of full
salary, and continued participation in the Company's executive compensation and
employee benefit plans and programs, in the event of termination of employment
by the Company other than for cause, or by the individual due to breach of the
agreement by the Company. The periods for the continuation of salary and
participation in such plans and programs for the named executive officers who
have accepted such agreements are as follows: C. R. Shoemate, 3 years; R. J.
Gillespie, 2 years; C. B. Storms, 18 months; and K. Schlatter, 18 months.
The Company maintains a Special Severance Program, applicable to full-time
U.S. salaried employees who do not have employment agreements, which provides
for continuation of salary and employee benefit programs for periods ranging
from three months to one year, depending primarily on length of service, in the
event of termination of employment within two years following a change in
control of the Company.
STOCK OWNERSHIP TABLE
Fidelity Management Trust Company of Boston, Massachusetts, as trustee of
the ESOP component of the Savings Plan, is the record owner of all of the
1,584,314 unallocated shares of ESOP preferred stock, or 72.98 percent of the
outstanding preferred stock of the Company. To the best of the Company's
knowledge, no person or group of persons owned beneficially more than five
percent of the outstanding common stock of the Company on March 2, 1995, the
record date.
14
<PAGE> 19
The following table sets forth the common stock ownership as of February
28, 1995 of each director, the named executive officers, and all directors and
officers as a group. All nominees, directors and executive officers as a group
own beneficially less than one percent of each of the outstanding common and
ESOP preferred stock.
<TABLE>
<CAPTION>
SHARES STOCK
NAME OWNED(1) OTHER(2) UNITS(3) TOTAL(4)
---------------------------- -------- -------- -------- --------
<S> <C> <C> <C> <C>
T. H. Black................. 5,000 -- 1,375 6,375
A. C. DeCrane, Jr. ......... 500 -- 68 568
W. C. Ferguson.............. -- 2,800 1,837 4,637
R. J. Gillespie............. 24,881 66,153 -- 91,034
E. R. Gordon................ 2,000 -- 4,163 6,163
G. V. Grune................. 2,200 -- 2,346 4,546
L. I. Higdon, Jr. .......... 200 -- 191 391
R. G. Holder................ 1,000 1,000 1,548 3,548
E. S. Kraus................. 200 -- 68 268
A. Labergere................ 12,474 -- -- 12,474
W. S. Norman................ 400 -- 191 591
K. Schlatter................ 17,553 51,821 2,996 72,370
C. R. Shoemate.............. 147,503 13,200 1,872 162,575
C. B. Storms................ 69,604 5,125 1,872 76,601
All directors and executive
officers as a group (28
persons)................. 666,622 187,700 29,387 883,709
</TABLE>
---------------
(1) Includes all shares which may be purchased before April 30, 1995 upon the
exercise of stock options as follows: R. J. Gillespie, 23,874; A. Labergere,
5,187; K. Schlatter, 15,374; C. R. Shoemate, 85,188; C. B. Storms, 20,937;
and all directors and executive officers as a group, 287,699.
(2) Includes shares held jointly with or owned by spouses or minor children or
held in certain fiduciary capacities. K. Schlatter, C. R. Shoemate, and all
directors and executive officers as a group disclaim beneficial ownership
of, respectively, 16,900, 13,200 and 37,400 of such shares.
(3) For the executive officers, the stock units represent annual bonus deferred
and credited in the form of common stock under the Deferred Stock Unit Plan.
Amounts so deferred are payable only in cash following retirement or
termination of employment. For the outside directors, the stock units
represent retainer and fees deferred in the form of common stock under the
Deferred Compensation Plan for Outside Directors described on page 5.
(4) In addition, Messrs. Gillespie, Schlatter, Shoemate and Storms have,
respectively, 1,536, 1,522, 1,536 and 1,808 shares, and all executive
officers as a group have a total of 25,378 shares, of ESOP preferred stock
allocated to their accounts in the Savings Plan.
15
<PAGE> 20
MATTERS TO BE ACTED UPON
Proposal 1. Election of Directors
The Board of Directors is divided into three classes, with one class
standing for election each year for a three-year term. In accordance with the
recommendation of its Compensation and Nominating Committee, the Board has
nominated Alfred C. DeCrane, Jr., who was elected by the Board in September
1994, Robert J. Gillespie, Ellen R. Gordon and George V. Grune for reelection,
each for a three-year term that will expire in 1998. In addition, the Board has
nominated Eileen S. Kraus, who was elected by the Board in September 1994, for
initial election by stockholders for a one-year term that will expire in 1996.
All of the nominees for election have consented to being named in this
proxy statement and to serve if elected. If, for any reason, any of the nominees
should not be a candidate for election at the meeting, the proxies will be cast
for substitute nominees designated by the Board of Directors unless the Board
has further reduced its membership prior to the meeting. The Board does not
anticipate that any of the nominees will be unavailable. The nominees and the
directors continuing in office will normally hold office until the annual
meeting of stockholders in the year indicated on this and the following pages.
Biographical information concerning each of the nominees and directors
continuing in office is presented on this and the following pages.
VOTE REQUIRED
A plurality of the votes of the shares present in person or represented by
proxy at the annual meeting is required to elect directors.
--------------------------------------------------------------------------------
CLASS III NOMINEES FOR THREE-YEAR TERMS EXPIRING IN 1998
--------------------------------------------------------------------------------
ALFRED C. DECRANE, JR.
Age -- 63
Director since September 1994
Member of the Compensation and Nominating and Finance
Committees
(Picture) CHAIRMAN AND CHIEF EXECUTIVE OFFICER OF TEXACO INC.
Mr. DeCrane was elected President of Texaco Inc. in 1983,
Chairman of the Board in 1987, and Chief Executive Officer in
1993. He is a director of Texaco Inc., CIGNA Corporation, and
Dean Witter, Discover & Co. He is a trustee of the Committee
for Economic Development and The Conference Board, Inc., a
director of the American Petroleum Institute, and a member of
the National Petroleum Council and The Business Roundtable. He
is also a member of the Board of Trustees of the University of
Notre Dame and a Managing Director of the Metropolitan Opera
Association.
16
<PAGE> 21
--------------------------------------------------------------------------------
ROBERT J. GILLESPIE
Age -- 52
Director since 1988
Member of the Finance Committee
(Picture) SENIOR VICE PRESIDENT OF THE COMPANY AND PRESIDENT OF THE BEST
FOODS DIVISION
Mr. Gillespie was elected a Senior Vice President of the
Company in November 1991. He joined the Company in 1965 and in
1976 became President of Canada Starch Company, a subsidiary
of the Company. In 1980 he was elected a Vice President of the
Company and appointed President of the Corn Products Unit of
CPC North America. Prior to his appointment as President of
the Best Foods Division in 1988, he served in several
executive positions within that Division. Mr. Gillespie is the
Company's representative to the Grocery Manufacturers of
America, Inc., a member of the GMA Industry Productivity
Council, and a member of the Advisory Board of the Sarah W.
Stedman Center for Nutritional Studies of Duke University.
--------------------------------------------------------------------------------
ELLEN R. GORDON
Age -- 63
Director since 1991
Chairman of the Audit Committee and member of the
Finance Committee
(Picture) PRESIDENT AND CHIEF OPERATING OFFICER OF TOOTSIE ROLL
INDUSTRIES, INC.
Ms. Gordon was elected President and Chief Operating Officer
of Tootsie Roll Industries, Inc. in 1978. Prior to her
election as President, Ms. Gordon served as Senior Vice
President. She joined the company in 1968 as a director and
from 1974 served in various executive capacities. Ms. Gordon
is a member of the Advisory Council of the Stanford University
Graduate School of Business, the Board of Fellows of the
Faculty of Medicine of the Harvard Medical School, the
Advisory Council of the J. L. Kellogg Graduate School of
Management of Northwestern University, the University of
Chicago Council on the Division of the Biological Sciences and
the Pritzker School of Medicine, the President's Export
Council, the Committee of 200, the Committee for Economic
Development, and a director of the National Confectioners
Association.
17
<PAGE> 22
--------------------------------------------------------------------------------
GEORGE V. GRUNE
Age -- 65
Director since 1985
Chairman of the Finance Committee and
member of the Audit Committee
(Picture) CHAIRMAN OF THE READER'S DIGEST ASSOCIATION, INC.
Mr. Grune joined The Reader's Digest in 1960 and served in
various executive capacities until his election in 1984 as
Chairman and Chief Executive Officer. Since August 1994 he has
continued to serve as Chairman. He is also a director of Avon
Products, Inc., Chemical Banking Corporation and Federated
Department Stores, Inc. He is chairman of The Boys & Girls
Clubs of America and vice chairman of the Board of Trustees of
The Conference Board, Inc. He is also a trustee of Duke
University and an overseer of Roy E. Crummer Graduate School
of Business at Rollins College.
--------------------------------------------------------------------------------
CLASS I NOMINEE FOR A ONE-YEAR TERM EXPIRING IN 1996
--------------------------------------------------------------------------------
EILEEN S. KRAUS
Age -- 56
Director since September 1994
Member of the Audit and Corporate Affairs Committees
(Picture) VICE CHAIRMAN OF SHAWMUT NATIONAL CORPORATION AND PRESIDENT OF
SHAWMUT BANK CONNECTICUT, N.A.
Ms. Kraus served as Vice Chairman, Consumer Banking and
Marketing Groups, Shawmut National Corporation from 1990 until
September 1992 and Executive Vice President of such Groups
from 1988 until July 1990. She is a director of The Stanley
Works and Yankee Energy System, Inc. Ms. Kraus is also a
trustee and executive committee member of Trinity College,
Kingswood-Oxford School and Horace Bushnell Memorial Hall, and
Chairman of the Greater Hartford Chamber of Commerce.
18
<PAGE> 23
--------------------------------------------------------------------------------
CLASS I DIRECTORS CONTINUING IN OFFICE UNTIL 1996
--------------------------------------------------------------------------------
THEODORE H. BLACK
Age -- 66
Director since 1989
Chairman of the Compensation and Nominating Committee and
member of the Corporate Affairs Committee
(Picture) FORMER CHAIRMAN AND CHIEF EXECUTIVE OFFICER OF INGERSOLL-RAND
COMPANY
Mr. Black served as President and Chief Operating Officer of
Ingersoll-Rand Company during 1988, and as Chairman and Chief
Executive Officer until November 1993. He is also a director
of General Public Utilities Corporation, McDermott
International, Inc. and Ingersoll-Rand Company.
--------------------------------------------------------------------------------
RICHARD G. HOLDER
Age -- 63
Director since 1992
Chairman of the Corporate Affairs Committee and
member of the Compensation and Nominating Committee
(Picture) CHAIRMAN AND CHIEF EXECUTIVE OFFICER OF REYNOLDS METALS
COMPANY
Mr. Holder served as President and Chief Operating Officer of
Reynolds Metals Company from 1988 until May 1992, when he
assumed his present position. Previously, he served as
Executive Vice President and Chief Operating Officer from
1986. Mr. Holder is a director of Universal Corp., a trustee
of the Virginia Foundation for Independent Colleges, and a
member of the Board of Directors of the National Association
of Manufacturers and the American Red Cross Corporate Advisory
Committee. Mr. Holder served as chairman of the Aluminum
Association from September 1991 through December 1993.
19
<PAGE> 24
--------------------------------------------------------------------------------
ALAIN LABERGERE
Age -- 60
Director since 1992
Member of the Corporate Affairs Committee
(Picture) SENIOR VICE PRESIDENT OF THE COMPANY AND PRESIDENT OF THE CPC
EUROPE DIVISION
Mr. Labergere joined the Company in 1983 and in 1990 was
appointed Vice President, Regional Operations, for the CPC
Europe Consumer Foods Division headquartered in Brussels. In
1991 he was appointed President of the CPC Europe Division and
elected a corporate Vice President. He was elected a Senior
Vice President of the Company in October 1991. Mr. Labergere
is a member of the Board of the Confederation of the Food and
Drink Industries of the EEC (CIAA) in Brussels.
--------------------------------------------------------------------------------
CLASS II DIRECTORS CONTINUING IN OFFICE UNTIL 1997
--------------------------------------------------------------------------------
WILLIAM C. FERGUSON
Age -- 64
Director since 1988
Member of the Compensation and Nominating and
Corporate Affairs Committees
(Picture) CHAIRMAN OF THE BOARD OF NYNEX CORPORATION
Mr. Ferguson retired as Chief Executive Officer of NYNEX on
January 1, 1995. Prior to October 1989, he served as President
and Chief Executive Officer, and Vice Chairman. Previously,
Mr. Ferguson served as President and Chief Executive Officer
of New York Telephone Co. from 1983. He is also a director of
General Re Corporation and Viacom Inc. Mr. Ferguson is a
director and former Chairman of The Business Council of New
York, a director of United Ways of Tri-State and Chairman of
the Board of Trustees of Albion College.
20
<PAGE> 25
--------------------------------------------------------------------------------
LEO I. HIGDON, JR.
Age -- 48
Director since 1993
Member of the Audit and Corporate Affairs Committees
(Picture) DEAN OF COLGATE DARDEN GRADUATE SCHOOL OF BUSINESS
ADMINISTRATION AT THE UNIVERSITY OF VIRGINIA
Mr. Higdon has headed the Darden School, located in
Charlottesville, Virginia, since October 1993. He joined the
University of Virginia from Salomon Brothers Inc, where he was
a member of the Executive Committee. During his 20-year career
at Salomon Brothers, Mr. Higdon served as a managing director
with responsibilities for corporate finance and mergers and
acquisitions, as the firm's vice chairman, and as its co-head
of global investment banking. He is also a director of
Crompton & Knowles Corp. and Africare and a trustee of
Georgetown University.
--------------------------------------------------------------------------------
WILLIAM S. NORMAN
Age -- 56
Director since 1993
Member of the Compensation and Nominating and
Finance Committees
(Picture) PRESIDENT AND CHIEF EXECUTIVE OFFICER OF THE TRAVEL INDUSTRY
ASSOCIATION OF AMERICA
Mr. Norman joined the Travel Industry Association of America
as President and Chief Executive Officer in the Fall of 1994.
Previously, he served as Executive Vice President of the
National Railroad Passenger Corp. (AMTRAK) since 1987. He is a
director of the Travel Industry Association of America, the
United Nations Association of the United States of America,
the U.S. Navy Memorial Foundation and the Logistics Management
Institute. He is also a member of the Board of Visitors of The
American University's Kogod College of Business
Administration.
21
<PAGE> 26
--------------------------------------------------------------------------------
CHARLES R. SHOEMATE
Age -- 55
Director since 1988
(Picture) CHAIRMAN OF THE BOARD, PRESIDENT AND CHIEF EXECUTIVE OFFICER
OF THE COMPANY
Mr. Shoemate was elected Chairman of the Board and Chief
Executive Officer in 1990. Prior to his election as President
in 1988, Mr. Shoemate served as Vice President of the Company
and President of the Corn Refining Division. Mr. Shoemate
joined the Company in 1962 and progressed through a variety of
positions in manufacturing, finance and business management.
In 1981, he was appointed President of Canada Starch Company,
a subsidiary of the Company. He is a director of CIGNA
Corporation, International Paper Co., the Grocery
Manufacturers of America, Inc., and the Americas Society. He
is a member of The Business Roundtable, the Committee for
Economic Development, and The Conference Board, Inc.
--------------------------------------------------------------------------------
Proposal 2. Appointment of Auditors
The Board of Directors, in accordance with the recommendation of its Audit
Committee, intends to appoint, subject to ratification by the stockholders, KPMG
Peat Marwick LLP as independent auditors in respect of the Company's operations
in 1995. If KPMG Peat Marwick LLP should decline to accept or become incapable
of accepting, or if their appointment is otherwise discontinued, the Board of
Directors will appoint other independent auditors. A partner of KPMG Peat
Marwick LLP will be present at the stockholders' meeting and will have an
opportunity to make a statement and respond to appropriate questions.
In addition to audit services, KPMG Peat Marwick LLP has rendered non-audit
services to the Company. The non-audit services are reviewed by the Audit
Committee to assure that performance thereof does not affect the firm's
independence.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR THIS
PROPOSAL.
Proposal 3. Approval of Amendment to 1993 Stock and Performance Plan
At the 1993 annual meeting, stockholders approved the CPC International
Inc. 1993 Stock and Performance Plan (the "Plan"). The Plan is designed to
promote the long-term financial success of the Company through
performance-related incentives to executive personnel. The Plan provides for
grants of stock options, restricted stock awards, and performance awards.
Information with respect to the current operation of the Plan appears on page 8
of this proxy statement.
The Omnibus Budget Reconciliation Act of 1993 amended Section 162(m) of the
Internal Revenue Code of 1986. Under this section, the allowable tax deduction
for certain compensation paid to each of the executive officers named in the
Summary Compensation
22
<PAGE> 27
Table on page 11 is limited to $1 million. Certain performance-based
compensation, however, is not subject to this deduction limitation. The material
terms of such performance-based compensation, including the maximum amounts
payable to any individual and the performance goals to be used, must be
disclosed to stockholders and approved by them for the compensation to qualify
as performance-based.
The Board of Directors has adopted, subject to stockholder approval, an
amendment to the Plan which should satisfy the new requirements for full
deductibility of compensation paid under the stock option and performance award
components of the Plan. The main features of the amendment are as follows, but
the description is qualified in its entirety by reference to the complete text
of the amendment, which appears as an Exhibit to this proxy statement.
- The number of options that may be awarded to any individual in any one
calendar year will be limited to 150,000 shares.
- Performance goals will be established as the basis of performance awards
and payments. The performance goals will be selected from one or more of
the following criteria and objectives: total stockholder return (based on
the change in the price of a share of the Company's common stock, and
dividends paid); earnings per share; operating income; net income; return
on stockholders' equity; return on assets; economic value added; and cash
flows. The Compensation and Nominating Committee of the Board of
Directors shall establish the applicable performance goal within the time
period required for the compensation to qualify as performance-based
under Section 162(m). Also, payments to any individual in respect of
performance awards for any performance cycle shall not exceed $5 million
in cash and shall not exceed 150,000 shares of common stock of the
Company.
VOTE REQUIRED
The favorable vote of a majority of the shares of stock present, or
represented by proxy, at the annual meeting is required for approval by the
stockholders of the amendment to the 1993 Stock and Performance Plan.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT YOU VOTE FOR THIS
PROPOSAL.
OTHER BUSINESS
The Board of Directors knows of no other matters to be brought before the
meeting. However, if other proposals are properly presented, the persons named
in the accompanying proxy will vote upon them in accordance with their best
judgment.
PROPOSALS FOR THE 1996 ANNUAL MEETING
It is anticipated that the 1996 annual meeting of stockholders will be held
on Thursday, April 25, 1996. Stockholder proposals for inclusion in the
Company's proxy statement for that meeting must be received by the Secretary of
the Company no later than November 15, 1995. Additionally, under the Company's
By-laws, any other business, including the
23
<PAGE> 28
nomination of candidates for director, may be presented at the meeting by a
stockholder only if a written notice identifying such business or candidates is
received by the Secretary of the Company not earlier than January 26 nor later
than February 23, 1996. A copy of the By-laws will be furnished to any
stockholder without charge upon written request to the Secretary.
ADDITIONAL INFORMATION
If you plan to attend the Annual Meeting, please complete the reservation
form on the inside back cover and return it either with your proxy card or
directly to the Company at the address indicated on the reservation form.
A summary of the meeting will be included in the midyear report which will
be mailed to stockholders on or about July 25, 1995.
The rules of the Securities and Exchange Commission require that an annual
report accompany or precede the proxy materials. However, no more than one
annual report need be sent to the same address. If more than one annual report
is being sent to your address and you wish to reduce the number of annual
reports you receive, please mark the Discontinue Annual Report Mailing box in
the Special Action area on the proxy card.
PLEASE COMPLETE THE ENCLOSED PROXY CARD AND MAIL IT IN THE ENCLOSED
POSTAGE-PAID ENVELOPE AS SOON AS POSSIBLE.
By order of the Board of Directors,
/s/ JOHN B. MEAGHER
John B. Meagher
Secretary
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<PAGE> 29
RESERVATION FORM FOR ANNUAL MEETING
If you plan to attend the CPC International Inc. annual meeting of
stockholders to be held at Tamcrest Country Club, Route 9W, Montammy Drive,
Alpine, New Jersey, at 9:30 A.M. on Thursday, April 27, 1995, this form may be
used to request an admission ticket. The envelope provided for the return of
your proxy card may be used to return this form or you may mail it directly to
C. B. Magarro, Assistant Secretary, International Plaza, P.O. Box 8000,
Englewood Cliffs, New Jersey 07632-9976.
I plan to attend the meeting. Please send me an admission ticket for the
number of persons indicated below.
Name
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Address
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City, State Zip Code
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Number of persons attending
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<PAGE> 30
EXHIBIT
AMENDMENT OF
CPC INTERNATIONAL INC.
1993 STOCK AND PERFORMANCE PLAN
FIRST: The first sentence of Section 1.3 is revised to read as follows:
The Plan shall be administered by the Compensation and Nominating
Committee of the Board of Directors, which shall consist of two or
more members, each of whom is a Disinterested Person and an
outside director within the meaning of Section 162(m) of the Code.
SECOND: Section 2.1 is relettered to be Section 2.1(a), and a new Section
2.1(b) is added to the Plan to read as follows:
(b) Notwithstanding any other provision of the Plan, in no event
shall any Participant be awarded Options covering more than 150,000
shares in any one calendar year.
THIRD: The second paragraph of Section 4.2 is revised to read as follows:
The Committee shall establish Performance Goals for each Cycle on
the basis of such criteria and to accomplish such objectives as the
Committee may from time to time select; provided, however, that
such selection shall be from among one or more of the following
criteria and objectives: total stockholder return (based on the
change in the price of a share of the Company's Common Stock, and
dividends paid); earnings per share; operating income; net income;
return on stockholders' equity; return on assets; economic value
added; and cash flows. The Committee shall establish the applicable
Performance Goal for the relevant Cycle in writing prior to the
latest date permitted in order for the Performance Units to be
treated as qualified performance-based compensation under Section
162(m) of the Code and regulations and Internal Revenue Service
administrative pronouncements thereunder. During any Cycle, and
subject to Section 4.3(a), the Committee may adjust the Performance
Goals for such Cycle as it deems equitable in recognition of
unusual or non-recurring events experienced by the Company during
the Cycle, but only to the extent such adjustment would not cause
any portion of the Performance Units, upon payment, to be non-
deductible pursuant to Section 162(m) of the Code.
FOURTH: Section 4.3(a) is revised to read as follows:
(a) The Committee shall determine the number of Performance Units
contingently allotted to each Participant for the Cycle which have
been earned by him on the basis of the Company's performance in
relation to the established Performance Goals. The Committee shall
certify in writing, prior to any payment in respect of Performance
Units pursuant to subsection (b),
E-1
<PAGE> 31
the extent to which the Performance Goals have been satisfied. Such
written certification may be made in approved minutes of a Committee
meeting or in any other manner which satisfies the requirements for
tax deductibility under Section 162(m) of the Code. Notwithstanding
any other provision of the Plan, payments of cash, shares of Common
Stock, or any combination thereof (as determined by the Committee
under Section 4.3(b)) to any Participant in respect of Performance
Units under subsection (b) for any Cycle shall not exceed $5,000,000,
with respect to the cash payment for such Units, and shall not exceed
150,000 shares of Common Stock, with respect to the Common Stock
payment for such Units.
FIFTH: The first sentence of Section 4.3(b) is deleted and replaced with
the following sentences:
(b) Payment in respect of the Performance Units which are earned by
a Participant shall be made in cash, in shares of Common Stock of
equal value (determined on the basis of Fair Market Value and
computed to the nearest full share), or in any combination of cash
and shares of Common Stock, as determined by the Committee in its
sole discretion. Payment in shares of Common Stock shall be subject
to such terms and conditions as the Committee may determine,
including, among others, restrictions on the right to transfer such
Common Stock. The Committee shall also have discretion to provide
that the payment of a Performance Unit may be deferred until the
expiration of such period of time or the fulfillment of such other
conditions as the Committee shall specify at the time of the award.
SIXTH: This Amendment is effective as of January 1, 1995, subject to its
approval by the shareholders of the Company.
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PROXY
CPC INTERNATIONAL INC.
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF
THE COMPANY FOR ANNUAL MEETING ON APRIL 27, 1995
The undersigned hereby appoints CHARLES R. SHOEMATE, CLIFFORD B. STORMS and
JOHN B. MEAGHER, as Proxies, each with the power to appoint his substitute, and
hereby authorizes each of them to represent and to vote, as designated on the
reverse side hereof, all the shares of common and ESOP preferred stock of CPC
International Inc. which the undersigned is entitled to vote at the annual
meeting of stockholders to be held at Tamcrest Country Club, Route 9W, Montammy
Drive, Alpine, New Jersey on April 27, 1995 at 9:30 A.M., local time, or any
adjournment thereof, and in their discretion, upon any matters which may
properly come before the meeting.
Election of four Directors, each for a term of three years.
Nominees:
Alfred C. DeCrane, Jr.
Robert J. Gillespie
Ellen R. Gordon
George V. Grune
Election of one Director for a term of one year.
Nominee: Eileen S. Kraus
(Change of Address/Comments)
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(If you have written in the above space, please mark the
corresponding box on the reverse side of this card)
SEE REVERSE SIDE
(LOGO) Printed on recycled paper
/ X / Please mark your votes as in this example. 6654
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR PROPOSALS 1, 2 AND 3. THE ESOP TRUSTEE SHALL VOTE UNALLOCATED ESOP
PREFERRED STOCK AS DIRECTED ON THIS PROXY BY THE PARTICIPANT.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1, 2 AND 3
1. Election of Directors (see reverse)
FOR WITHHELD
/ / / /
For, except vote WITHHELD from the following nominee(s):
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2. Appointment of KPMG Peat Marwick LLP as Independent Auditors
FOR AGAINST ABSTAIN
/ / / / / /
3. Approval of Amendment to the 1993 Stock and Performance Plan
FOR AGAINST ABSTAIN
/ / / / / /
SPECIAL ACTION
Discontinue Annual Report Mailing for this Account / /
Change of Address on Reverse Side. / /
PLEASE DATE, SIGN EXACTLY AS NAME APPEARS HEREON AND RETURN PROMPTLY IN THE
ENCLOSED ENVELOPE. WHEN SHARES ARE HELD BY JOINT TENANTS, BOTH SHOULD SIGN.
WHEN SIGNING AS ATTORNEY, EXECUTOR, ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE
GIVE FULL TITLE AS SUCH. IF A CORPORATION, PLEASE SIGN IN FULL CORPORATE NAME
BY PRESIDENT OR OTHER AUTHORIZED OFFICER. IF A PARTNERSHIP, PLEASE SIGN IN
PARTNERSHIP NAME BY AUTHORIZED PERSON.
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SIGNATURE(S) DATE
